KANSAS CITY — Convenience stores may be the most straightforward of shopping channels. They provide people with items they might need in transit, whether that’s simply to and from work or on a cross-country road trip.

As American culture becomes mobile and meals are replaced with more substantive snacks, c-stores have become a natural place for people to find sustenance on the go. While the majority of purchases are still driven by gas, much of the growth in c-stores comes down to food purchases, whether it's packaged snacks or foodservice items.

“Consumers are coming into the store because they have a need to satisfy hunger or boost their energy,” said Krisanne Flamini, category manager of total snacks, confections and packaged cake for Wawa. “If that’s dictating their purchase, they might grab an energy bar, but if they are looking for something to satisfy an emotional need, they are going for the more indulgent snack.”

The numbers, as reported by IRI, reflect this. While overall dollar sales for fresh bread dropped 10.4 percent in the 52 weeks ending Dec. 2, 2018, individual categories were up such as bakery snacks (0.6 percent), donuts (5.2 percent), pastry/Danish/coffee cakes (1.7 percent), muffins (4.7 percent), other fresh rolls/bun/croissants (2 percent), bagels (7.7 percent), and pies and cakes (8.8 percent). Many of these increases confirm that breakfast is the biggest opportunity for baked goods in this channel. Salty snacks apparently pick up the slack throughout the rest of the day, showing a 5.2 percent increase during the same time period with only a few categories — corn snacks, nutritional bars and granola bars — seeing a decrease.

“Convenience stores have seen the most growth in food forward v-stores that focus on preparing fresh foods,” said Jennifer LaPaugh, senior director of global market research and insights for Dawn Foods. “Consumers see these stores as a convenient way to get their breakfast and snacks as well as an alternative to quick-service restaurants and other foodservice segments.”

Foodservice fresh

C-stores aren’t exactly known for their fresh food options, but Mintel suggested that this could be an opportunity rather than a hindrance. While 74 percent of c-store foodservice consumers say the food has gotten better, only 36 percent are satisfied with the healthy options, according to Mintel's “Convenience Store Foodservice US, March 2018" report. By providing healthier or premium food options through its foodservice business, a c-store chain can stand out among the competition.

“We are seeing operators continue to focus on roller grill programs for the value purchasers but adding premium and healthier options to attract customers who would not normally make the roller grill purchase,” said Dave Gonnella, vice president of sales at Gonnella Baking Co. “While all-day snacking is trending on the foodservice side of c-store, we believe made-to-order (MTO) programs are the next evolution where much of the future innovation will take place.”

MTO programs give bakers a big opportunity to experiment and offer c-stores something new. Gonnella Baking has seen growth for its mini burger buns, for example, as chicken sandwich and burger programs are reoriented toward all-day snacking. These programs need fresh baked goods and healthier bread/bun carries, Gonnella said. The company is also seeing a lot of innovation opportunity in the breakfast daypart.

“We’re rolling out a French toast hot dog bun for the roller grill with cinnamon, maple and butter flavors,” he said. “The French toast bun pairs well with a savory breakfast sausage and can be bundled with a coffee program to help increase the overall check size.”

C-store operators are becoming more willing to bake onsite, Gonnella said. which paves the way for frozen dough and par-baked products. Baking onsite, though it requires more floorspace, equipment and skilled labor, can differentiate a c-store from its competitors.

“Baking at the store level provides a halo effect over the whole store and will help operators build brand loyalty by developing a premium experience,” Gonnella said.

Gonnella Baking offers c-store operators a line of fruit bread frozen dough that can be portioned into bites, topped with sugar or icing, and baked on-site.

“We find a lot of operators are using both freshly baked and packaged products,” said Daniele Bianchini, senior brand and customer marketing manager for Otis Spunkmeyer at Aryzta. “They have the freshly baked for the aroma to capture consumers, but then they also offer the packaged cookies that consumers can enjoy later.”

Otis Spunkmeyer, an Aryzta brand, developed its No Funky Stuff line of cookies specifically to meet that consumer demand for better-for-you foods and offers both in packaged products and foodservice offerings. The line is made without artificial flavors and colors, high-fructose corn syrup (HFCS) and partially hydrogenated oils (phos).

While both product lines are seeing growth, Bianchini said that the packaged growth is largely driven by the labor costs it enables c-store operators to save.

Clean label comfort food

Consumers’ definition of better-for-you is lax. It can mean something that’s packed with extra nutrition such as fiber or protein, but it can also refer to an ingredient list that they recognize. This trend toward clean label gives snacks — even those not normally deemed good for you — a healthy halo. Otis Spunkmeyer’s No Funky Stuff cookies tap into this clean label trend that makes even a cookie a permissible indulgence for health-conscious consumers. Bakers and snack manufacturers can use the trend to deliver acceptable treats that still meet the needs of those walking into c-stores looking to feed a craving.

“Health and wellness is becoming increasingly important,” Flamini said. “But I think the desire to satisfy hunger and cravings is still important within the c-store, so food manufacturers really need to find that balance. It’s important to have some better-for-you items, but it’s still important that we continue to satisfy our customers’ cravings within the c-store.”

When consumers enter a c-store looking for something to eat, they often want something quick, easy and tasty. But a cleaner ingredient label can differentiate a snack or baked good from other options on the shelf. Despite a clean label being a priority for consumers, there isn’t a consensus of what that means.

“Dawn believes there is no ‘one-size-fits-all’ definition of what clean label is, and we operate as a strategic partner to develop custom products that meet their clean label standards,” LaPaugh said.

For Dawn’s line of clean label mixes and bases, that means no artificial colors, flavors, preservatives or sweeteners. These products also do not contain phos or HFCS.

In 2017, Aryzta launched the grab-and-go line of individually packaged cookies specifically for c-stores. These 4 oz. cookies adhere to the brand’s No Funky Stuff promise, eliminating artificial flavors and colors, HFCS and phos, all to make the ingredient list friendlier to those shoppers turning packaging over.

Even as shoppers head to foodservice options for meals they deem healthier, they aren’t fully abandoning c-store snacks, at least not according to Bob Clark, vice president of marketing for Herr Foods.

“They are definitely still grabbing potato chips as an accompaniment to the sandwich they get on the foodservice side,” he said.

However, Clark said he also sees so much growth for Herr’s kettle-cooked chips because of the movement toward simpler ingredients and old-fashioned methods — another way comfort food can be permissible.

“Kettle chips are growing faster than traditional chips, and that may be because consumers perceive that they are made more simply,” he said. “It’s not to say it’s healthier, but it is simpler.”

Playing accompaniment

The growth of foodservice doesn’t mean the decline of packaged snacks in c-stores.

“Shoppers tend to gravitate more toward flavored snacks and purchase snacks used as an accompaniment for quick-serve meals throughout the day,” said Chad Matthews, senior vice president of sales in small format channels for Frito-Lay North America, a subsidiary of PepsiCo, Inc.

There are several strategies bakers and snack manufacturers can use to snag this impulse purchase. High visibility and displays help get product in front of the shoppers. Consumers are drawn to the snacks when c-store operators place product in their way next to or on the way to the foodservice counter.

“Snacks need to be very visible in the store, so your product needs to be right there in the middle of the store in a kiosk so consumers are walking past snacks as they head to prepared foods,” Clark said.

Size and variety also come into play.

“C-stores have gone from selling big bags to much more emphasis on single-serve,” Clark said.

Larger bags don’t lend themselves to the on-the-go lifestyle convenience stores serve, nor do they make a natural counterpart to a foodservice meal.

Bakers and snack manufacturers need to provide c-store shoppers with a wide variety of flavors and products. This channel isn’t heavily driven by price. Its shoppers could be considered captive as they are there and buying for convenience, so companies have to win the impulse purchase another way than a hot deal. Extreme or innovative flavors and new products is one way to do that.

“In c-stores, we’re seeing snack manufacturers coming out with extreme flavors across all categories, whether it’s something that’s completely unique or an intense flavor,” Flamini said. “We’ve seen a blend of snack and confection where they’re mixing sweet and salty together.”

The c-store shopper comes in and out of the store day after day, Clark said. And because they are individuals making impulse purchases, companies can use c-stores as incubators for new ideas.

“There is a lot of desire for variety, and it drives us to develop more flavors, even limited-time-only flavors, to keep excitement going and keep them engaged,” he said. “We’ll put the newest flavors in the c-store immediately. People are going back to the convenience store every day for lunch, and they’re always trying something new, and that’s driving innovation.”

Compared with supermarkets, c-store purchases are primed to encourage shoppers to try something new instead of grabbing a standard favorite.

“It’s an individual purchase that you’re buying for yourself, while in the supermarket, it’s usually mom buying for the family, so she has to know the product is a winner before making the purchase,” Clark said. “At the c-store, it’s a one-time purchase, so it’s grab-and-go by nature.”

Shoppers also find products in the c-store aisles that they wouldn’t find in supermarkets, where shelf space is at a premium. While a bakery or snack company may be wary to dedicate supermarket shelf space to a new product that isn’t a sure-thing, the c-store is a completely different story. In fact, the channel is a playground in which a company can try out its new ideas.

“While I wouldn’t call it a test, we’re introducing a new product in a single-serve size in this channel,” Clark said. “If it does well, we’ll consider selling it in a full-size bag and offering it to supermarkets.”

Herr’s has seen recent success with its pub-style pretzels. With pretzels being a popular snack in the company’s mid-Atlantic market, a sourdough variety was an obvious choice. The company also launches limited-time-only flavors in its kettle chip line alongside its ever-popular jalapeño flavor. Herr Foods’ is pursuing cheese curls, which Clark said are seeing rapid growth among younger consumers.

Frito-Lay North America uses a rigorous process relying on consumer insights to link demand to unmet needs and marketplace opportunities.

“Our innovation pipeline for the c-store channel is a result of this deep consumer understanding,” Matthews said.

As people redefine the way they eat and shop for their food, the c-store holds a lot of opportunity for baking and snack companies. Bakeries can find opportunities in the foodservice operations, breakfast foods and clean label comfort foods. Snack companies can leverage their products as counterparts to foodservice purchases, and they can generate excitement with innovative flavors and products. With freedom and permission to experiment in this space, baking and snack companies can grab consumers’ attentions and get that impulse purchase.